Cytec Announces First Quarter Results; Full Year 2006 Outlook Updated

Net loss for the first quarter of 2005 was $6.5 million or $0.16per basic share on net sales of $564 million. Included in the net losswere purchase accounting related charges of $10.5 million (after-tax$7.7 million, or $0.18 per basic share), related to acquiredinventories from Surface Specialties being recorded at fair valuewhich exceeded normal manufacturing cost, and $37.0 million or $0.88per basic share related to the write-off of in-process research anddevelopment costs of Surface Specialties, a restructuring charge of$1.3 million ($1.0 million after-tax, or $0.02 per basic share)related to employee redundancy costs, a charge of $20.0 million(after-tax $12.7 million or $0.30 per basic share) related to currencyand interest rate derivative transactions associated with the SurfaceSpecialties acquisition, a $4.4 million settlement to resolve adispute over an environmental matter (after-tax $3.2 million or $0.08per basic share) and an income tax benefit of $16.2 million ($0.38 perbasic share) resulting from the completion of prior year tax audits.Excluding these items, net earnings were $38.9 million or $0.92 perbasic share ($0.89 per diluted share basis).

David Lilley, Chairman, President and Chief Executive Officersaid, "Our first quarter results gave us a positive start to 2006. Asexpected, we have our share of challenges, such as raw material costswhich remain volatile and are higher than the year ago period.However, we are encouraged by the continuing improvement in ourSpecialty Chemical segments, notably the Surface Specialties productlines. Cytec Engineered Materials had a solid quarter while BuildingBlock Chemicals was impacted by poor margin spreads on acrylonitrileand plant downtime due to scheduled maintenance work."

Cytec Performance Chemicals Sales increased 15% to $226 million;Operating Earnings increased to $17.9 million

Mr. Lilley continued, "In Cytec Performance Chemicals, sales ofproduct lines related to the acquisition of Surface Specialties,completed on February 28, 2005, added 10% to sales, selling volumesincreased 3%, selling prices increased 4% and exchange rate changesdecreased sales 2%. Strong sales volume in mining chemicals andspecialty additives and phosphines were partially offset by lowerselling volumes in polymer additives resulting from weak polyolefinmarket demand and price competition in our mature products. Also inwater treatment chemicals, selling volumes were lower, primarily intothe paper sector.

"Operating earnings increased $10.3 million primarily due to theaddition of the acquired product lines partially offset by higher rawmaterial costs and expense of $0.6 million for stock options and stockappreciation rights settled in stock related to the adoption of SFAS123R. Included in 2005 and related to the Surface Specialtiesacquisition, is a write-off of acquired in-process research anddevelopment costs of $6.9 million and a charge of $1.3 million for theexcess of the fair value of the finished goods inventory of theacquired business over normal manufacturing cost.

Cytec Surface Specialties Sales increased 122% to $374 million;Operating Earnings increased to $29.4 million

"In Cytec Surface Specialties, sales of product lines related tothe acquisition of Surface Specialties added 114% to sales, sellingvolumes increased 12%, selling prices increased 1% and exchange ratechanges decreased sales 5%. The increase in selling volumes was strongin Europe particularly in the latter part of the quarter and Asia alsoshowed good growth. North American demand also improved towards thelatter part of the quarter.

"Operating earnings of $29.4 million was primarily due to theaddition of the Surface Specialties product lines, increased sellingvolumes and selling prices and lower operating costs partially offsetby higher raw material costs, unfavorable exchange rate changes andexpense of $1.1 million for stock options and stock appreciationrights settled in stock related to the adoption of SFAS 123R. Includedin 2005 and related to the Surface Specialties acquisition, is awrite-off of acquired in-process research and development costs of$30.1 million and a charge of $9.2 million for the excess of the fairvalue of the finished goods inventory of the acquired business overnormal manufacturing cost.

Cytec Engineered Materials Sales increase 9% to $139 million;Operating Earnings increase to $23.9 million

"Cytec Engineered Materials selling volumes increased 8%, sellingprices increased 2% and exchange rate changes decreased sales 1%. Theselling volume increase was primarily due to higher build rates forlarge commercial aircraft partially offset by the expected ramp downin volume to a European high-end automotive program.

"Operating earnings improved slightly to $23.9 million, primarilydue to higher selling volumes and selling prices which were mostlyoffset by increased raw material costs and expense of $0.6 million forstock options and stock appreciation rights settled in stock relatedto the adoption of SFAS 123R.

Building Block Chemicals Sales increase 12% to $80 million;Operating loss of $0.3 million

"Building Block Chemicals selling volumes increased 10%, sellingprices increased 3% and exchange rate changes decreased sales 1%. Thevolume increase was primarily in Europe, partially offset by lowerselling volumes in Asia.

"The operating loss for the quarter was primarily the result ofpoor margin spreads on acrylonitrile sales as well as the impact ofthe acrylonitrile plant being down two weeks during the quarter forscheduled maintenance. In addition, our melamine manufacturing jointventure partner did not take any production during the quarter. Theresulting operational inefficiencies associated with the melamineplant being down for about half the quarter reduced earnings byslightly over $1 million. Also included is expense of $0.3 million forstock options and stock appreciation rights settled in stock relatedto the adoption of SFAS 123R."

Earnings in Associated Companies

Earnings in Associated Companies for the first quarter of 2006decreased from the prior year period as a result of the May 2005 saleof our 50% interest in CYRO Industries to our former partner, Degussa.

Corporate and Unallocated

James P. Cronin, Executive Vice President and Chief FinancialOfficer commented, "During the quarter, we recorded a netrestructuring charge of $0.4 million made up of an additionalrestructuring charge of $1.7 million for employee-related severancecosts and a reduction of $1.3 million of the previous quarterrestructuring accrual primarily as a result of incurring less coststhan originally estimated due to personnel leaving Cytec on their own.Both of these relate primarily to the formation of Cytec SpecialtyChemicals, which was announced in the fourth quarter of 2005, wherebywe combined our specialty chemicals product lines into oneorganization under one leadership team.

"Included in other income (expense), net in the first quarter of2005 is a net pre-tax loss of $20.0 million ($12.7 million after-tax)pertaining to currency and interest rate derivative transactionsrelated to the acquisition of the Surface Specialties business."

Interest Expense

Interest expense is significantly higher than the prior yearquarter primarily due to the higher average levels of debt outstandingresulting from the Surface Specialties acquisition.

Income Tax Expense

Mr. Cronin added, "Our tax provision for the first quarter of 2006was $14.5 million, or 27%, on the earnings before income taxes. Forthe comparable period of 2005, the Company's effective tax rate on theloss from continuing operations for the quarter was a tax benefit of66%. The 2005 tax rate was favorably impacted by a reduction in incometax expense of $16.2 million ($0.38 per basic share) in the quarterrelated to the completion of exams of prior year tax returns for theyears 1999 through 2001 and by losses incurred in the U.S. on thederivatives related to the financing for the Surface Specialtiesacquisition and was unfavorably impacted by the non-deductiblewrite-off of in-process research and development expenses related tothe Surface Specialties acquisition. Excluding these items, theunderlying rate for the same period of 2005 was 27%."

Other

Mr. Cronin continued, "In regards to the adoption of SFAS 123R,operating earnings in the quarter include additional charges for stockoptions and stock appreciation rights that are settled in common stockof $2.6 million pre-tax. We also recorded a cumulative effect chargeof $1.2 million after-tax primarily relating to the recognition ofcosts for the fair value of our cash settled stock appreciation rightswhich had been issued in prior years.

Cash Flow

"Cash flow provided by operations was $21 million for the quarter.Trade accounts receivable dollars were up sequentially due to highersales but days outstanding were essentially flat with year end 2005.Inventory dollars were up as we have built some inventory in light ofstronger demand and raw material costs increased from year endalthough our days are flat with year end 2005. Capital spending forthe quarter was $16 million and our full year estimate of $110 millionis unchanged. We continue to pay down debt in advance of scheduledpayment dates and during the quarter we paid down $53 million of ourdebt."

2006 Outlook

Mr. Lilley commented further, "Our first quarter results havegiven us momentum in a number of areas and there are a few areas thatneed improvement. On the demand side, the story remains the same, thatis, we expect our aerospace markets to continue to grow as the buildrates for large commercial aircraft, business jets, military aircraftand commercial rotorcraft continue to increase and our customersutilize more advanced composites. Our forecast for weak industrialdemand in North America and Europe, as it relates to our CytecSpecialty Chemicals segments, remains the same for now. We did seeimprovement in the latter part of the quarter in Europe but we remaincautious until we see a more sustainable improvement in demand. Wecontinue to expect Asia-Pacific and Latin America to have good growthin 2006. Volatile raw material and energy costs continue to makepassing along price increases difficult and we see this continuingthroughout 2006. Oil costs are presently high and we are assessingwhether this is a temporary spike or a new cost level. Our concernremains primarily propylene derivative costs as they impact ourSpecialty Chemicals business. Depending on the view we take thisquarter, we will decide what compensating actions, such as productprice increases, we can initiate."

Mr. Lilley continued with some additional comments, "In CytecSpecialty Chemicals we see no change to our overall guidance withimprovement in Cytec Surface Specialties offset by a reduction inCytec Performance Chemicals. More specifically, in Cytec PerformanceChemicals, we see continuing strong demand in our mining chemicals andspecialty additives and phosphine chemicals product lines and moremoderate demand in the remainder with the exception of polymeradditives. In polymer additives, our team has done a good job with ourtechnologically differentiated products but we are facing a toughoperating environment with severe price competition in certain of thelower end products. We are looking at all appropriate actions in lightof this operating environment to improve returns in polymer additives.Taking into account the above, we are changing our full year guidancefor sales to $900 to $925 million from our previous guidance of$900-940 million and for operating earnings to $65 to $70 million fromour previous guidance of $70 to $75 million.

"In Cytec Surface Specialties, we were encouraged by the improveddemand in the latter part of the quarter in North America and Europe.We expect to continue to see good progress in the Asia-Pacific andLatin American regions and from new global product introductions.There are many opportunities to improve our manufacturing and supplychain operations and while these improvement initiatives take time toimplement we believe we are on track to improve earnings in thissegment over the short and medium term. Taking into account the above,we are changing our full year guidance for sales to $1.48 to $1.52billion from our previous guidance of $1.46 to $1.51 billion and foroperating earnings to $95 to $105 million from our previous guidanceof $85 to $95 million.

"In Cytec Engineered Materials, we continue to anticipateincreased aircraft production spurred by the recent orders and therising backlog at the large aircraft manufacturers, and continuingdevelopment of new applications for advanced composites. We have astrong order book for the year although it is somewhat back-endloaded. In light of the continuing opportunities with aircraftmanufacturers as they develop new platforms for the future, wecontinue to expect a high level of investment in our selling,technical and research and development expenses. Taking into accountthe above, we are changing our full year guidance for sales to $600 to$620 million from our previous guidance of $590 to $620 million andfor operating earnings to $115 to $120 million from our previousguidance of $110 to $120 million.

"Building Block Chemicals had a difficult first quarter. Oil costsare higher and we continue to watch the impact on propylene costs andacrylonitrile margin spreads. We had previously expected some marginimprovement for the rest of the year but this now appears unlikely.Our operating team is focused on what they can control, particularlymanufacturing costs, to offset the weak product selling prices. Takinginto account the above, we are changing our full year guidance forsales to $310 to $330 million from our previous guidance of $340 to$355 million and for operating earnings to $12 to $15 million from ourprevious guidance of $17 to $20 million.

"We forecast no change in our guidance for Corporate andUnallocated, other income/(expense), equity earnings and interestexpense, net. Our forecast for our underlying annual effective taxrate for ongoing operations remains at 27%.

"Overall, we remain cautious on the demand side and expectcontinuing raw material volatility and as a result we are reiteratingour forecast of overall annual 2006 sales to be in a range of $3.3 to$3.4 billion and our forecast for full year diluted earnings per shareremains at $3.45 to $3.70. As a reminder, our reported results for2005 include only 10 months of operations from the acquired SurfaceSpecialties business. Two month pro-forma 2005 sales were $225million."

The guidance for the year includes pre-tax expense for stockoptions and stock appreciation rights settled in stock ofapproximately $10.5 million ($7.7 million after-tax or $0.16 perdiluted share) as a result of adopting SFAS 123R as of January 1,2006.

Excluded from the full year guidance are the following items.Approximately $3 million pre-tax for integration expenses related tothe Surface Specialties acquisition and this spending will begin inthe second quarter of 2006. This is reduced from our previous estimateof $4 to 5 million. These integration expenses, the majority of whichare duplicative in nature, are anticipated to be incurred primarily asa result of the elimination of transition service agreements currentlyin place with the former owner regarding the information technologyhardware infrastructure and are expected to be completed in 2006. Alsoexcluded is the cumulative effect of accounting change after-taxcharge of $1.2 million related to the adoption of SFAS 123R. Inaddition, we previously estimated restructuring charges in the firsthalf of the year to be in the range of $3 to $5 million, of which $1.7million was recorded in the first quarter and we continue to identifyfurther benefits of the previously announced organizationconsolidation of the specialty chemicals product lines into CytecSpecialty Chemicals. We continue to look for other restructuringopportunities to improve our productivity in our chemicalmanufacturing operations.

In closing Mr. Lilley commented, "Overall we had a solid start to2006 but continue to face rapidly changing market conditions. We arehopeful the economic momentum we saw in the latter part of the quarterin North America and Europe will continue. However, the Cytec teamremains focused on what we can control so we can deliver the highestperformance for all our stakeholders."

Investor Conference Call to be Held on May 3, 2006 11:00 A.M. ET

Cytec will host their first quarter earnings release conferencecall on May 3, 2006 at 11:00 a.m. ET. The conference call will also besimultaneously webcast for all investors from Cytec's websitewww.cytec.com. Select the Investor Relations page to access the liveconference call.

A recording of the conference call may be accessed by telephonefrom 2:00 p.m. ET on May 3, 2006 until May 24, 2006 at 11:00 p.m. ETby calling 888-203-1112 (U.S.) or 719-457-0820 (International) andentering access code 1726247. The conference call recording will alsobe accessible on Cytec's website for 3 weeks after the conferencecall.

Use of Non-GAAP Measures

Management believes that net earnings, basic and diluted earningsper share before special items, which are non-GAAP measurements, aremeaningful to investors because they provide a view of the Companywith respect to ongoing operating results. Special items representsignificant charges or credits that are important to an understandingof the Company's overall operating results in the period presented.Such non-GAAP measurements are not recognized in accordance withgenerally accepted accounting principles (GAAP) and should not beviewed as an alternative to GAAP measures of performance. Areconciliation of GAAP measurements to non-GAAP can be found at theend of this release.

Forward-Looking and Cautionary Statements

Except for the historical information and discussions containedherein, statements contained in this release may constitute"forward-looking statements" within the meaning of the PrivateSecurities Litigation Reform Act of 1995. Achieving the resultsdescribed in these statements involves a number of risks,uncertainties and other factors that could cause actual results todiffer materially, as discussed in Cytec's filings with the Securitiesand Exchange Commission.

Corporate Profile

Cytec Industries Inc. is a global specialty chemicals andmaterials company focused on developing, manufacturing and sellingvalue-added products with pro forma sales in 2005 of approximately$3.2 billion. Our products serve a diverse range of end marketsincluding aerospace, adhesives, automotive and industrial coatings,chemical intermediates, inks, mining, plastics and water treatment. Weuse our technology and application development expertise to createchemical and material solutions that are formulated to performspecific and important functions in the finished products of ourcustomers.
CYTEC INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in millions, except per share amounts)
-----------------
Three Months
Ended
March 31,
2006 2005
----------------------------------------------------------------------

Net sales $819.4 $563.9
Manufacturing cost of sales 645.9 440.3
Selling and technical services 52.8 44.7
Research and process development 18.8 13.0
Administrative and general 24.9 17.8
Amortization of acquisition intangibles 8.8 4.0
Write-off of acquired in-process research and
development - 37.0
----------------------------------------------------------------------
Earnings from operations 68.2 7.1
Other income (expense), net (0.8) (20.4)
Equity in earnings of associated companies 0.8 2.1
Interest expense, net 14.5 9.5
----------------------------------------------------------------------
Earnings (loss) from continuing operations before
income taxes and cumulative effect of accounting
change 53.7 (20.7)
Income tax provision (benefit) 14.5 (13.7)
----------------------------------------------------------------------
Earnings (loss) from continuing operations before
cumulative effect of accounting change 39.2 (7.0)
Cumulative effect of accounting change (net of income
tax benefit of $0.7) (1.2) -
----------------------------------------------------------------------
Earnings (loss) from continuing operations 38.0 (7.0)
Earnings from discontinued operations (net of income
tax provision of $0.7) - 0.5
----------------------------------------------------------------------
Net earnings (loss) $38.0 $(6.5)

Basic earnings (loss) per common share:
Earnings (loss) from continuing operations before
cumulative effect of accounting change $0.84 $(0.17)
Cumulative effect of accounting change, net of taxes (0.03) -
Earnings from discontinued operations, net of taxes - 0.01
----------------------------------------------------------------------
Net earnings (loss) $0.81 $(0.16)

Diluted earnings (loss) per common share:
Earnings (loss) from continuing operations before
cumulative effect of accounting change $0.82 $(0.17)
Cumulative effect of accounting change, net of taxes (0.03) -
Earnings from discontinued operations, net of taxes - 0.01
----------------------------------------------------------------------
Net earnings (loss) $0.79 $(0.16)

----------------------------------------------------------------------
Dividends per common share $0.10 $0.10
----------------------------------------------------------------------

----------------------------------------------------------------------
Weighted average shares outstanding: (in thousands)
----------------------------------------------------------------------
Basic 46,914 42,119
----------------------------------------------------------------------
Diluted 48,061 42,119
======================================================================



CYTEC INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED NET SALES AND EARNINGS FROM CONTINUING OPERATIONS BY
BUSINESS SEGMENT
(Millions of dollars)
(Unaudited)

Three Months Ended
March 31,
------------- -------------
2006 2005
------------- -------------
Net sales
---------

Cytec Performance Chemicals
Sales to external customers $ 225.9 $ 196.0
Intersegment sales 1.8 1.1

Cytec Surface Specialties 374.0 168.2

Cytec Engineered Materials 139.0 127.8

Building Block Chemicals
Sales to external customers 80.5 71.9
Intersegment sales 23.1 23.2
-------- --------
Net sales from segments 844.3 588.2
Elimination of intersegment revenue (24.9) (24.3)
-------- --------

Total net sales $ 819.4 $ 563.9
======================================================================


% of % of
Sales Sales
------ ------
Earnings (loss) from operations
-------------------------------

Cytec Performance Chemicals $ 17.9 8% $ 7.6 4%
Cytec Surface Specialties 29.4 8% (27.9) -17%
Cytec Engineered Materials 23.9 17% 23.4 18%
Building Block Chemicals (0.3) 0% 7.3 8%
------ ------

Earnings from segments 70.9 8% 10.4 2%

Corporate and Unallocated (2.7) (3.3)
------ ------

Total earnings from operations $ 68.2 8% $ 7.1 1%
======================================================================

Note:
1. Earnings from operations in 2005 for Cytec Performance Chemicals
includes $1.3 for amortization of inventory step up of finished
goods acquired and $7.0 charge related to write-off of acquired
in-process research and development, both related to the Surface
Specialties acquisition.
2. Earnings from operations in 2005 for Cytec Surface Specialties
includes $9.2 for amortization of inventory step up of finished
goods acquired and $30.0 charge related to write-off of acquired
in-process research and development, both related to the Surface
Specialties acquisition.
3. Corporate and Unallocated in 2005 includes $1.3 charge for
restructuring and in 2006 includes a net restructuring charge of
$0.4.



CYTEC INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in millions, except per share amounts)
-----------------------
March 31, December 31,
2006 2005
----------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $47.8 $68.6
Trade accounts receivable, less allowance for
doubtful accounts of $7.2 and $7.8 at March
31, 2006 and December 31, 2005, respectively 519.3 493.8
Due from related party 10.1 8.0
Other accounts receivable 71.3 65.9
Inventories 442.7 424.7
Deferred income taxes 13.2 12.2
Other current assets 26.9 31.4
----------------------------------------------------------------------
Total current assets 1,131.3 1,104.6
----------------------------------------------------------------------

Investment in associated companies 21.0 20.3

Plants, equipment and facilities, at cost 2,091.2 2,064.3
Less: accumulated depreciation (1,018.5) (988.8)
----------------------------------------------------------------------
Net plant investment 1,072.7 1,075.5
----------------------------------------------------------------------
Acquisition intangibles, net of accumulated
amortization of $60.7 and $51.0 at March 31,
2006 and December 31, 2005, respectively 491.2 491.5
Goodwill 1,022.0 1,012.2
Other assets 103.9 106.4
----------------------------------------------------------------------
Total assets $3,842.1 $3,810.5
======================================================================

Liabilities
Current liabilities
Accounts payable $291.3 $278.6
Short-term borrowings 33.3 34.3
Current maturities of long-term debt 8.0 51.2
Accrued expenses 193.9 218.3
Income taxes payable 43.4 43.5
----------------------------------------------------------------------
Total current liabilities 569.9 625.9
----------------------------------------------------------------------
Long-term debt 1,224.6 1,225.5
Pension and other postretirement benefit
liabilities 434.7 432.5
Other noncurrent liabilities 235.6 224.4
Deferred income taxes 56.4 64.1

Stockholders' equity
Common stock, $.01 par value per share,
150,000,000 shares authorized; issued
48,132,640 shares 0.5 0.5
Additional paid-in capital 244.3 235.6
Retained earnings 1,183.0 1,149.7
Unearned compensation - (2.5)
Accumulated other comprehensive income (loss):
Minimum pension liability (115.0) (115.0)
Unrealized net gains on cash flow hedges 1.1 0.4
Accumulated translation adjustments 41.4 27.6
----------------------------------------------------------------------
(72.5) (87.0)
Treasury stock, at cost, 1,089,883 shares in
2006 and 1,833,812 shares in 2005 (34.4) (58.2)
----------------------------------------------------------------------
Total stockholders' equity 1,320.9 1,238.1
----------------------------------------------------------------------
Total liabilities and stockholders' equity $3,842.1 $3,810.5
======================================================================



CYTEC INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in millions)
--------------------
Three Months Ended
March 31,
----------------------------------------------------------------------
2006 2005
----------------------------------------------------------------------

Cash flows provided by (used in) operating
activities
Net earnings (loss) $38.0 $(6.5)
Earnings from discontinued operations, net of
taxes - 0.5
----------------------------------------------------------------------
Earnings (loss) from continuing operations 38.0 (7.0)
Noncash items included in net earnings from
continuing operations:
Depreciation 27.9 23.3
Amortization 10.9 4.2
Share-based compensation 2.9 0.9
Deferred income taxes (0.9) (8.2)
Write-off of acquired in-process research and
development - 37.0
Amortization of write-up to fair value of
finished goods purchased in acquisition - 10.5
Gain on sale of assets - (1.0)
Cumulative effect of accounting change, net of
taxes 1.2 -
Other 3.1 (2.1)
Changes in operating assets and liabilities
(excluding effects of 2005 acquisition):
Trade accounts receivable (19.1) (5.4)
Other receivables (7.5) 4.4
Inventories (13.2) (31.7)
Other assets (4.8) 0.5
Accounts payable 9.4 (7.8)
Accrued expenses (27.7) (13.8)
Income taxes payable (1.9) (24.4)
Other liabilities 2.6 (11.1)
----------------------------------------------------------------------
Net cash provided by (used in) operating
activities of continuing operations 20.9 (31.7)
Net cash provided by operating activities of
discontinued operations - 1.1
----------------------------------------------------------------------
Net cash provided by (used in) operating
activities 20.9 (30.6)
----------------------------------------------------------------------
Cash flows (used in) investing activities
Acquisition of business, net of cash received (0.5) (1,501.1)
Additions to plants, equipment and facilities (16.3) (17.1)
Proceeds received on sale of assets - 1.4
----------------------------------------------------------------------
Net cash used in investing activities (16.8) (1,516.8)
----------------------------------------------------------------------
Cash flows provided by (used in) financing
activities
Proceeds from long-term debt 23.0 725.0
Payments on long-term debt (75.3) -
Change in short-term borrowings (1.0) 581.9
Cash dividends (4.7) (4.0)
Proceeds from the exercise of stock options and
warrants 26.4 8.8
Deferred financing costs - (4.7)
Excess tax benefits from share-based payment
arrangements 6.4 -
Other (0.6) (1.0)
----------------------------------------------------------------------
Net cash provided by (used in) financing
activities (25.8) 1,306.0
----------------------------------------------------------------------
Effect of currency rate changes on cash and cash
equivalents 0.9 (5.7)
----------------------------------------------------------------------
Decrease in cash and cash equivalents (20.8) (247.1)
Cash and cash equivalents, beginning of period 68.6 323.8
----------------------------------------------------------------------
Cash and cash equivalents, end of period $47.8 $76.7
======================================================================



Cytec Industries Inc.
Reconciliation of GAAP and Non-GAAP Measures
Amounts in millions except per share amounts

Management believes that net earnings, basic and diluted earnings per
share before special items, which are non-GAAP measurements, are
meaningful to investors because they provide a view of the Company
with respect to ongoing operating results. Special items represent
significant charges or credits that are important to an understanding
of the Company's overall operating results in the periods presented.
Such non-GAAP measurements are not recognized in accordance with
generally accepted accounting principles (GAAP) and should not be
viewed as an alternative to GAAP measures of performance.


Three Months Ended March 31, 2006
Net Diluted
Earnings EPS
-------- -------
GAAP Net Earnings $38.0 $0.79
- Cumulative effect of accounting change (after-tax) 1.2 0.03
- Restructuring charge (after-tax) 0.3 -
Non-GAAP Net Earnings $39.5 $0.82
======== =======


Three Months ended March 31, 2005
Net Basic
Earnings EPS
-------- -------
GAAP Net Loss $(6.5) $(.16)
- Purchase accounting charges for fair value of
inventory in excess of normal manufacturing cost
(after-tax) 7.7 0.18
- Write-off of in-process research and development
costs of Surface Specialties 37.0 0.88
- Loss on currency and interest rate derivative
transactions (after-tax) 12.7 0.30
- Income tax benefit reflecting favorable
developments on of tax audits with respect to prior
years returns (16.2) (0.38)
- Restructuring costs (after-tax) 1.0 0.02
- Settlement to resolve a dispute over an
environmental matter (after-tax) 3.2 0.08
Non-GAAP Net Earnings $38.9 $0.92
======== =======

Non-GAAP diluted earnings per share $0.89
=======